TRANSFORMING

Corporations Could Be the Best Weapon in Combating Climate Change

An essay by Nicola Peill-Moelter (PhD ’97), Director of Sustainability Innovation at VMware.

ILLUSTRATON BY EDMON DE HARO

There is this popular, long-held notion that business and the environment are at odds. That conservation is a fight against capitalism and its rabid thirst for profits is at the expense of the environment. That commerce is an unstoppable force that must be reined in for the sake of the future of the planet.

As a lifelong environmentalist, I get that.

I grew up in a small, rural village, 100 miles northwest of New York City—close to but really a world away from the urban environment. I was raised in an environmentally conscious household, appreciating my natural surroundings, conserving water and energy, and recycling and composting long before those practices were commonplace.

Those values stayed with me. After getting a chemical engineering degree and taking a job in the field, I decided to merge my passion for the environment with my profession. I headed to Caltech to earn a doctorate in environmental engineering science, wanting to address the world’s most pressing challenges by getting ahead of them, rather than fixing the damage after it was done.

While at Caltech, I first came across the Rocky Mountain Institute, an energy and sustainability think tank. They had a unique thesis that was compelling to me: The path to wider and accelerated environmental change, they hypothesized, was finding the intersection of profit and sustainability—where solving our most pressing environmental problems also makes business sense.

In my previous role as the sustainability director at the cloud delivery platform Akamai Technologies, I worked to put this thesis into action. Akamai’s network is supported by hundreds of thousands of servers in over 150 countries, and we’ve saved tens of millions of dollars engineering ways to operate this network more efficiently. But finding the business case to decarbonize Akamai’s energy use was not so straightforward. My pitch to the executive team and the board: Clean-powered services is a feature that our customers value and will give Akamai a competitive differentiator. My proof was that over the past 10 years, there was a strong trend of large, global companies setting aggressive renewable energy and carbon emissions reduction goals to stabilize their energy costs and address climate change. And many of those companies were our customers, collectively accounting for a quarter of our annual revenue. Our executives and board, while not versed in sustainability or renewable energy, understood “customer demand,” “service feature,” and “competitive differentiation.” Convinced of the value, they supported a goal to power 50 percent of our global network with renewable energy by 2020.

That’s the lesson: There’s no business case for the concept of sustainability. But when sustainability goals align with business values and objectives, it can boost both environmental progress and the bottom line.

The smartest companies are using sustainability to inspire innovation. Nike recycles plastic to make its Flyknit footwear. P&G formulated the first enzymatic detergent that works in cold water—an attempt to eliminate the need for consumers to heat their wash water. The plant-based burgers of Impossible Foods and Beyond Meat aim to dramatically reduce the environmental impacts of animal-based foods. Tesla, with its focus on style, quality, and swagger, exploded the global market for electric vehicles that had previously been relegated to a fringe market. Companies that recognize the opportunity presented by our most urgent environmental challenges, and design solutions to address them, will outperform those that don’t.

And if companies themselves don’t see and seize the opportunity, investors are taking note of companies’ risk exposures to the impacts of climate change. The increasing frequency and intensity of storms, floods, and fires are damaging infrastructure and disrupting supply chains. Longer and more severe droughts, shrinking aquifers, and degraded soils threaten all of agribusiness. And as the world weans itself off fossil fuels, transitioning to renewable energy and electric vehicles, oil and gas industries are in danger. Investors want to see that companies are aware of and resilient in the face of these risks and will look to invest in those that are.

This shift in the corporate sector gives me hope. Now that the capitalist system is sufficiently motivated to address climate change, it can become a powerful force to accelerate progress.

Don’t get me wrong though. We have a daunting challenge in front of us, and it will take everyone—corporations, governments, and individuals—to make real progress. So I like to share my learnings with local communities. And while I’m practical about the challenges we face with climate change, I don’t focus on the scary consequences, which understandably cause people to feel hopeless and tune out. I paint a vision of an amazing future that they can help create by taking action. Use your voice and vote with your dollar, buying from companies that are actively trying to reduce their carbon emissions; eating less meat; investing in renewable energy and electric vehicles; meeting with your legislators about enacting smart policy; and joining a grassroots organization.